You can also use a spreads account to access shorter-term daily FTSE markets. Readers should note that opening such an account is normally subject to suitability and status checks.

If your account application is accepted then, once logged in, you will be able to access the charts and the current prices. Access is normally free, however, the catch is that you could get the odd sales letter or email from your firm.

Of course, if you do decide to trade, be aware that spread trading and contracts for difference carry a high degree of risk and you may lose more than your initial deposit.

Advanced Charts for the FTSE 100

Although the charting packages normally differ from platform to platform, in order to assist you with your FTSE 100 analysis, most charts generally have:

Free Demo Account

If you are interested in a free Test Account which allows users to get a better understanding of financial spread betting, and practice trading markets like the FTSE 100, then you could always take a look at:

All of the above companies provide a Demo Account that lets users practice trading, apply a variety of orders, try out strategies and review charts.

How to Spread Bet on the FTSE 100?

As with many global markets, investors can spread bet on stock market indices, like the FTSE 100, to either rise or fall.

If we log on to Financial Spreads, we can see they are showing the FTSE 100 Rolling Daily market at 5785.3 - 5786.3. This means an investor can spread bet on the FTSE 100 market:

Going above 5786.3, or Going below 5785.3

When spread betting on the FTSE 100 index you trade in £x per point.

Where a point is one point of the index itself.

Should you choose to invest £4 per point and the FTSE 100 moves 24 points then that would alter your profit/loss by £96. £4 per point x 24 points = £96.

Rolling Daily Index Markets

An important aspect of this Rolling Daily Market is that there is no closing date for your trade. You do not have to close your trade, should it still be open at the end of the day, it will roll over to the next session.

If you allow your trade to roll over and are spread betting on the market to:

Increase - then you will be charged a small overnight financing fee, or Decrease - then a small payment is normally credited to your account

FTSE 100 Trading Example 1

Then you could decide that you want to buy a spread bet at 5786.3 and risk, let's say, £2 per point.

With this trade you make a profit of £2 for every point that the FTSE 100 index moves higher than 5786.3. However, it also means that you will make a loss of £2 for every point that the FTSE 100 market moves below 5786.3.

Considering this from another angle, should you buy a spread bet then your profits (or losses) are worked out by taking the difference between the closing price of the market and the initial price you bought the market at. You then multiply that difference in price by your stake.

Therefore, if after a few trading sessions the UK stock market rose, you might want to close your position to lock in your profit.

So if the stock market increased then the spread, set by the spread betting company, might move up to 5849.4 - 5850.4. In order to close your position you would sell at 5849.4. Accordingly, with the same £2 stake:

FTSE 100 Interactive Trading Example

Below we have a simple interactive example from Financial Spreads on how spread betting works when trading the FTSE 100.

This quick example shows how the Stop Loss works and also how your upside is unlimited.

Note that Stop Losses are not guaranteed but you can opt for a Guaranteed Stop Loss with Financial Spreads.

How to Spread Bet on the UK 100 - Example 2

Looking at a spread trading website like Tradefair, we can see that they are showing the UK 100 Rolling Daily market at 5787.8 - 5788.8. This means an investor can spread bet on the UK 100 market:

Rising above 5788.8, or Falling below 5787.8

Whilst financial spread betting on the UK 100 index you trade in £x per point. So, should you decide to risk £5 per point and the UK 100 moves 27 points then that would make a difference to your bottom line of £135. £5 per point x 27 points = £135.

So, if you continue with the above spread of 5787.8 - 5788.8 and assume that:

You have done your research, and

Your research suggests that the UK 100 index will move higher than 5788.8

Then you might decide that you want to go long of the market at 5788.8 and risk, for the sake of argument, £3 per point.

So, you make a profit of £3 for every point that the UK 100 index moves above 5788.8. However, such a bet also means that you will lose £3 for every point that the UK 100 market decreases below 5788.8.

Looked at another way, if you ‘Buy’ a spread bet then your profit/loss is calculated by taking the difference between the settlement price of the market and the price you bought the market at. You then multiply that difference in price by your stake.

As a result, if after a few sessions the UK stock market started to move upwards then you could choose to close your trade in order to guarantee your profit.

So if the market moved up then the spread might change to 5831.6 - 5832.6. You would close your position by selling at 5831.6. Therefore, with the same £3 stake your profit would be calculated as:

How to Trade FTSE Futures

If we go to a platform like FinancialSpreads, you can see that they are currently pricing the FTSE 100 March Futures market at 5717.3 - 5721.3.

Therefore, you can speculate on the FTSE 100 index:

Settling above 5721.3, or Settling below 5717.3

On the expiry date for this 'March' futures market, 15-Mar-13.

As with the daily markets above, with the FTSE futures market you speculate on the FTSE 100 index in £x per point. So, if you decided to have a stake of £4 per point and the FTSE 100 moves 35 points then that would alter your profits (or losses) by £140. £4 per point x 35 points = £140.

FTSE 100 Futures Trading Example

Then you may decide to buy the futures market at 5721.3 and risk, let's say, £5 per point.

With this contract you make a profit of £5 for every point that the FTSE 100 index rises higher than 5721.3. Nevertheless, it also means that you will make a loss of £5 for every point that the FTSE 100 market moves lower than 5721.3.

Thinking of this in a slightly different way, if you are spread trading and you 'Buy' a market then your P&L is calculated by taking the difference between the settlement price of the market and the initial price you bought the spread at. You then multiply that price difference by the stake.

As a result, if, on the expiry date, the FTSE 100 settled higher at 5749.9, then:

Applying Technical Analysis to the FTSE 100

Below, an old but still useful case study on the UK stock market by Shai Heffetz, InterTrader, 28-Apr-2011.

Being an index of the 100 biggest companies on the London Stock Exchange, the FTSE 100 is considered a quite reliable yardstick of the health of the economy in general.

If one looks at the period since the index started at 1000 on the 1st of January 1984, the picture certainly looks healthy. The current value of 6041 represents growth of more than 500 per cent over the 27-year term.

The fact of the matter is, however, that the index is currently well below the record level of 6950.6 it reached in December 1999, which means that in effect we have seen negative growth over the past 12 years.

FTSE 100 Technical Analysis

If we consider technical analysis of the FTSE 100 then, looking at the Ichimoku Kinko Hyo on the candlestick chart below, everything seems to point to a bull market as the price is far above the cloud.

It is also well above the red Tenkan-Sen (short-term average) and the blue Kijun-Sen (longer-term average). The green Chinkou Span line is also well above the price 26 days ago, strengthening the perception of a bull market.

There are, however, a couple of things that could indicate that we should not jump to conclusions. The red Tenkan-Sen has turned flat, which indicates short-term uncertainty in the market, and the cloud is also very thin, which further points to indecisiveness in the market.

If the price should break through the recent high of 6064.80, we might see it test the previous high of 6106.80 it reached on 8 February. A cautious trader would not enter a medium or long-term position long position before this happens. A potential stop loss level in this case is the red Tenkan-Sen line.

In the current market, traders should wait for further signs of weakness before entering into a short position. If the price drops as far as the Ichimoku cloud, it could be on its way to test the previous low of 5505.30 on 16 March.

A careful trader will wait for the price to break downwards out of the cloud before going short, but this could rob you of most of the profits in the swing trade. An alternative, but riskier, approach would be to go short as soon as the price drops below the blue Kijun-Sen.

About the FTSE and the London Stock Exchange

The London Stock Exchange (LSE) is one of the world's oldest stock exchanges. It's been trading for over 300 years. According to the LSE website it started life in the coffee houses of 17th century London (pre-Starbucks).

For readers who are not familiar with the term 'FTSE 100' it is simply an index of the 100 largest companies on the London Stock Exchange. The index is maintained and owned jointly by the Financial Times and the London Stock Exchange.

The index came into being on 1 January 1984 with a base value of 1,000. It reached a record level of 6950.6 on 30 December 1999. The financial crisis of 2007–2010 saw it drop dramatically to 3,500. Since then it has recovered to a large extent.

FTSE Definitions

FTSE: Financial Times Stock Exchange. These firms (FT and LSE) are jointly responsible for the compilation and maintenance of the main stock indices reflecting the performance of the UK's top shares

FTSE 100: The index of the UK's top 100 companies, as ranked by their market capitalisation. Also referred to as UK100

FTSE 250 or FTSE MID 250: The index of the next 250 FTSE companies as ranked by their market capitalisation

FTSE 350: The index of the top 350 UK companies by market capitalisation. A combination of the FTSE 100 and FTSE 250 stocks